There is no such thing as a zero sum game

Month: March 2011

The “how badly people do on civics and general knowledge test” sub-category of Cheap Journalism is always good for some light entertainment. But this recent example from Newsweek is especially delightful for the pontificating it inspires.

For more than two centuries, Americans have gotten away with not knowing much about the world around them. But times have changed—and they’ve changed in ways that make civic ignorance a big problem going forward. While isolationism is fine in an isolated society, we can no longer afford to mind our own business. What happens in China and India (or at a Japanese nuclear plant) affects the autoworker in Detroit; what happens in the statehouse and the White House affects the competition in China and India. Before the Internet, brawn was enough; now the information economy demands brains instead.

Goodness, where to begin!

Let’s start with the obvious. It’s always puzzling to see “competition” used with blithe disregard for what it means; why is it that competition is considered a lovely value at the level of the firm but a horror at the level of the country? Does a similar principle not apply? Of course decisions are interrelated and it is worthwhile to understand that interrelation, but the latent assumption seems to be that if we ain’t getting ahead we’re falling behind. It is not a fundamentalist opinion to demonstrate that the global economy is not a zero-sum game.

But that’s too close to real arguments for my taste. Let’s focus instead on

Before the Internet, brawn was enough; now the information economy demands brains instead.

This is a remarkably peculiar statement. To achieve more with a given set of resources requires innovation: once upon a time the only “production” humans achieved was to transform time and stone tools into dead animals and dinner. “Brains” have, of course, are irreplaceable in the process of achieving more. This is not abstract: the printing press, electricity, the loom, agriculture… we could populate this list ad infinitum. One entry on the list would be the Internet. The article is instead in a peculiar corner of arguing that brawn was enough to invent the Internet which immediately made brawn redundant.

Which is trivially nonsense. The “information economy”, whatever that may be, is not a revolution in the progress that pushes gently but tangibly at the constraint inherent in turning scarce resources into output that humans value. That process has never been the brute force of brawn.

Roger Goodell has joined the debate on the semantics of the word “economics”. Welcome, Roger! From ESPN (warning: obnoxious auto-load video alongside article) today:

Commissioner Roger Goodell wrote NFL players Thursday, outlining the league’s last proposal to the union and cautioning that “each passing day puts our game and our shared economics further at risk.”

Now what might “shared economics” mean? Of the several points of disagreement between NFL owners and players in the current conflict, one is, of course, money. I’m going to regretfully assume that the resource to which Goodell’s “economics” refers is only money. So what does he mean about that money?

Can “shared economics” mean a “shared allocation of resources”? It’s possible; the two sides can take, in some sense, shared ownership of a specific or formulaic allocation of the pot o’ gold from professional football. But this is odd. A problem (paraphrased) is that the owners want a larger cut of money off-the-top, which is different from the status quo. So the mutually agreed allocation of resources from the last CBA has thus far never been on the table.

The whole problem, of course, is in the sharing, in the allocation. It is nearly tautological that a disagreement about the allocation threatens the allocation. So that can’t be it.

Can “shared economics” mean “shared money”? This is also possible. There’s a work stoppage. In the worst case, the 2011 season is lost or curtailed and there will be a massive loss of revenue. Even in the best case, there is the fuzzier risk of alienating fans, contractual partners, and antitrust authorities, which could plausibly do the same. This seems a much likelier contender for what Goodell had in mind when he picked the word “economics” in his letter.

So to Goodell economics is a synonym for money, or revenue, or resources. This is depressing even for someone of my own view that the word “economics” is hopelessly lost to language forever. “Economics” is no more the resource than football is 22 people running around on some grass.